Time For Value?

Well, the Green Bay Packers draft is completed. How it went is anyone’s guess. However, the drama created by QB Aaron Rodgers continues. Will he stay or will he go?? Really nothing I can do to control.

Much like investing in the equity markets. We have no idea what will happen in the short term. We have no control of any of it. We can only look at the long term and realize there are strategies that work long term.

 For example, we know that over the long term there is a premium to owning value stocks as well as small stocks. We know that over the long-term value and small will out-perform large growth stocks.

Unfortunately, over the last 5 to 6 years both have under performed the S&P 500 and by substantial amounts. As a side note I just read that 20% of the S&P 500 stocks account for most of the gain. Talk about lack of diversification.

However, there is hope that value and small stock are ‘coming’ back. Please read the link below from Dimensional Fund Advisors DFA founder David Booth.

https://www.thewealthadvisor.com/article/dfa-founder-david-booth-value-stocks-comeback?mkt_tok=NDQ2LVVIUy0wMTMAAAF8zn-WPxDModRL3RcEDenWSyJVbQipegbfrR75KFMQbZZuLWAv1DJwMEEbKd8euawy1K9rKSRza7pnhszl0umTf7dgmtfygRw1mUUrXWf6fSgs

There was also an article from Vanguard predicting that value stocks will out-perform over the next decade.

OK OK I don’t believe in anyone’s ability to predict the future. Regardless many continue to look for predictions.

The real benefit is that with discipline, diversification pays off in the long run.

You must ask yourself, are you looking for maximum return? Or are you looking to control risk? Most studies say investors fear loss more than they enjoy higher gains.

Only you can answer this question.

Let me know if I can help- answer any questions. Except whether Aaron Rodgers will be the Packers quarterback in 2021. Because I have no idea.

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